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Equity Dilution & Pre-Seed/Seed Cap Table Simulator
Runs scenarios on how prospective investment rounds will affect founder equity and dilution.
Use Case
Use this when negotiating term sheets with potential investors to protect founder equity from unnecessary dilution.
AI Prompt
Act as a venture capital legal advisor and financial modeler. I want to model my startup's equity dilution across our upcoming funding rounds. Our current setup: Founder 1 Equity %: [e.g., 60%], Founder 2 Equity %: [e.g., 40%], Current Option Pool: [e.g., 10%]. We plan to raise a Seed Round of [Insert Raise Amount, e.g., $1.5 million] at a pre-money valuation of [Insert Valuation, e.g., $6.5 million]. They also want us to expand our option pool by [e.g., 5%] post-money. Explain and calculate: 1. The post-money valuation. 2. The exact equity dilution and post-seed ownership percentages for Founder 1, Founder 2, the new Investors, and the Option Pool. 3. Strategic advice on renegotiating option pool terms to minimize founder dilution.
How to Use
- 1Input your team's current ownership configuration.
- 2Input the proposed investment parameters from your term sheet.
- 3Review the dilution analysis before finalizing legal agreements with founders and investors.
Example Output
Raising a 1.5 million dollar round at a 6.5 million dollar pre-money valuation values your company at 8 million dollars post-money. This means new investors will own 18.75 percent of the company. If we expand the option pool by 5 percent post-money, the option pool will dilute existing shareholders. Founder 1 equity drops from 60 percent to approximately 45.75 percent, and Founder 2 drops from 40 percent to 30.5 percent. To minimize dilution, negotiate to create the option pool pre-money or scale down the option pool size based on actual hiring needs over the next 18 months.
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